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3 trends that can change your price and timeline

Friday, March 11, 2016 - 08:00
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Previously I discussed two questions I ask when working with clients to help them determine when the right time is to grow a business or sell a business. I want to know your walk away price and how much time do you have to get there.

Knowing the answers to these two questions is important when setting your business plans. They are generally controllable factors. We can exert a certain amount of influence over bother factors. But there are also outside factors that will always impact both your price and timeline, but with the proper planning you can reasonably control both. But these are three things that may influence your price and timeline.

Consolidation is Changing

I have said many times that consolidation will continue, but it will change. It will change because consolidation is not unique to collision repair, or even the automotive industry in general. Industries consolidate over time. They also follow a predictable path of consolidation. Within the collision industry we are already seeing signs that the largest consolidators are moving into a new phase of consolidation, where mega deals, new developments (i.e. brownfields and greenfields) and cost rationalization take on a larger role.

The result in many markets, especially markets where consolidators already have a strong presence is a softening of prices. This is especially true for the single and dual location businesses. But I have also seen some evidence of prices softening even for larger regional MSOs in markets with multiple consolidators. Every market is unique, and I continue to hear of aggressive unsolicited anchor offers being made and deals being done on very aggressive timelines. Which begs the question, why such the rush to get deals done?

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